Psychological differences in financial desicion making by people from different generations

Abstract

In all countries, a pressing issue was the problem of teaching the basics of finan­ cial literacy of the population.Dynamic changes in economic environment, especially regarding financial markets, cause the necessity to develop financial skills of societies. Improving financial literacy of the population has become one of the most urgent problems of modern society.And Kazakhstan is not an exception. Population in the Kazakhstan is facing an increasingly complex and perilous financial world. The more urgent the task, as the population once again faced with the economic crisis in 2015. The development of new technologies makes it possible to improve the quality of financial services, which in turn, makes the population lives more comfortable. Dif­ ferent Apps for smartphones and tablets make it possible to buy food, clothes, tickets, home appliances and even insurance on vehicles without leaving your home. It really makes life easier for the population, but requires him to ownership of a minimum of knowledge and skills in the field of computer, and in the area of financial literacy. Currently, the importance of financial education has increased significantly for two main reasons: 1) the responsibility and the risk of making decisions that can have a serious impact on the lives and the future of each individual, are transferred from the state to citizens; 2) financial services, government support are becoming more diverse, which means that you must make a difficult choice from a wide selection of options. Financial literacy gives people the knowledge, understanding, skills and confidence to enable them to make financial decisions and take actions that are most appropriate in any given situation. Despite the large number of different initiative in this field, the financial education level in Kazakhstan is rather low. Both generations are in economically disadvantaged positions, lack financial knowledge and access to mainstream financial institutions. The present study examined age differences in financial decision­making by comparison of financial literacy and decision­making ability of individuals of different ages. The survey assesses the level of young and old customer’s financial literacy, examines young and old customer’s decision factors and correlation between them and basic financial knowledge and skills.